Dow Chemical 2012 Annual Report Download - page 154

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The Company granted performance deferred stock awards under the 1988 Plan. The 2012 Plan supersedes the 1988 Plan.
Under both plans, the performance deferred stock awards vest when the Company attains specified performance targets over a
predetermined period, generally one to three years. Compensation expense related to performance deferred stock awards is
recognized over the lesser of the service or performance period. Changes in the fair value of liability instruments are
recognized as compensation expense each quarter. The following table shows the performance deferred stock awards granted:
Performance Deferred Stock Awards Target
Shares
Granted (2)
Grant Date
Fair Value (3)
Shares in thousands
Year Plan (1) Performance Period
2012 1988 Plan January 1, 2012 – December 31, 2014 1,205 $ 34.00
2011 1988 Plan January 1, 2011 – December 31, 2013 1,109 $ 38.07
2010 1988 Plan January 1, 2010 – December 31, 2012 875 $ 27.79
(1) No shares were granted under the 2012 Plan during 2012.
(2) At the end of the performance period, the actual number of shares issued can range from zero to
250 percent of the target shares granted.
(3) Weighted-average per share
The following table shows changes in nonvested performance deferred stock:
Performance Deferred Stock 2012
1988 Plan
Shares in thousands
Target
Shares
Granted (1)
Grant Date
Fair Value (2)
Nonvested at beginning of year 1,904 $ 33.57
Granted 1,205 $ 34.00
Vested (828) $ 27.79
Canceled (27) $ 34.42
Nonvested at end of year 2,254 $ 35.92
(1) At the end of the performance period, the actual number of shares issued can range from
zero to 250 percent of the target shares granted.
(2) Weighted-average per share
Additional Information about Performance Deferred Stock
In millions 2012 2011 2010
Total fair value of performance deferred stock vested and delivered (1) $ 68 $ 77 $ 28
Related tax benefit $ 25 $ 28 $ 10
Total compensation expense for performance deferred stock awards (2) $ 21 $ 36 $ 143
Related tax benefit $ 8 $ 13 $ 53
(1) Includes the fair value of shares vested in prior years and delivered in the reporting year.
(2) Compensation expense in 2010 included $25 million related to the modification of equity instruments to liability
instruments for certain executive employees.
During 2012, the Company settled 1.0 million shares of performance deferred stock for $34 million in cash. During 2011,
the Company settled 1.2 million shares of performance deferred stock for $36 million in cash. During 2010, the Company
settled 0.3 million shares of performance of deferred stock for $8 million in cash. Total unrecognized compensation cost related
to performance deferred stock awards of $8 million at December 31, 2012 is expected to be recognized over a weighted-
average period of 0.81 years. At December 31, 2012, approximately 0.4 million performance deferred shares with a grant date
weighted-average fair value of $27.79 per share were vested, but not issued. These shares are scheduled to be issued in
February 2013.
In addition, the Company is authorized to grant up to 300,000 deferred shares of common stock to executive officers of the
Company under the 1994 Executive Performance Plan. No additional grants will be issued under this plan.